Annuity purchase & fund falls?
in Pensions, annuities & retirement planning
4 replies 458 views
When buying an annuity, I'm wondering what happens if a market crash type event comes along just as funds are being sold/transferred to the annuity provider. Are there mechanisms to pause/halt fund sales if they fall below a preset value? Or is it just hard luck?
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The fund is with Zurich (Managed AP), it's an old Allied Dunbar plan from 1989. I've now spoken to Zurich about cash options and all they offer are alternative funds or transfers to another provider. If my understanding is correct, the funds available for switching into have a 5% bid/offer price spread and would therefore seem to bake-in an immediate loss of 5% once switched. Again, that's if I've understood correctly.
Zurich will allow partial transfers, so if this is possible, would transferring 20% chunks into a SIPP, over a period of several weeks, be a sensible way to move it into cash? I have a first meet with an IFA coming up in late March so I probably won't do anything yet, but I'd like to get some understanding.
On an old product like that, you will be looking for the cash fund or deposit fund.
Many thanks for the help Dunstonh.